US embassy cable - 05BAGHDAD2807

C O N F I D E N T I A L SECTION 01 OF 03 BAGHDAD 002807 
 
SIPDIS 
 
E.O. 12958: DECL: 06/02/2011 
TAGS: ECPS, ECON, IZ, Media 
SUBJECT: NCMC BOARD UNDER QUORUM 
 
REF: A. 04 BAGHDAD 2296 
 
     B. BAGHDAD 1800 
     C. BAGHDAD 2191 
 
Classified By: Economic Minister Counselor Anne Derse for reasons 1.4 ( 
 
b) and (d). 
 
1.    (C) SUMMARY:  Membership of the National Communications 
and Media Commission (NCMC) Board of Commissioners is below 
the legally required quorum and, therefore, its decisions are 
subject to legal challenge. NCMC Director General (who 
prefers to be known as the CEO) Othman plans on presenting a 
list of commissioner candidates to President Talabani in 
July. The UK's Media Development and Advisory Team (MDAT) 
contract has been extended for 3 months and they will 
immediately begin lobbying the ITG for the appointment of a 
full nine member NCMC Board of Commissioners, which must be 
confirmed by the TNA. We will support MDAT's efforts and 
focus on the telecom initiatives pending before the NCMC. END 
SUMMARY 
 
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ORDER 65 REQUIRES QUORUM 
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2.    (SBU)  CPA Order 65 created the Iraqi Communications 
and Media Commission (since re-named the NCMC), the Board of 
Commissioners (&the Board8) of which consists of nine 
members. Decisions of the Board are made by majority vote, 
"provided that at least six (6) of the members are present 
and vote." The Board has been without the legally required 
quorum since November 23, 2004, when former PM Allawi forced 
the resignation of four of the nine commissioners, leaving 
the Board with five commissioners (REF A). In the interim, 
former NCMC Commissioner Masum's recent appointment as 
Minister of Communications leaves the Board with only 4 
members. Therefore, any decisions by the current Board are 
subject to legal challenge. We have pointed this out to 
Othman and discussed it with senior advisers to Prime 
Minister Ja,afari, since only Ja,afari has the authority to 
appoint NCMC commissioners subject to approval by majority 
vote of the Transitional National Assembly (REF B). 
 
3. (SBU) In addition, Order 65 requires monthly meetings. 
Board members who fail to participate in three or more 
successive meetings are subject to dismissal.  We have been 
unable to verify whether regular monthly meetings occur, but 
if they do, there is no record or procedure in place 
memorializing the meetings and the decisions made.  Again, 
challenging current board members' right to their appointed 
seats will inflict further damage to the NCMC. We have 
discussed the situation with Othman who agreed with the 
necessity of complying with Order 65. 
 
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NCMC INITIATIVES SUBJECT TO CHALLENGE 
------------------------------------- 
 
3.    (SBU) The NCMC has several critical initiatives 
scheduled for completion in 2005.  The Wireless Local Loop 
(WLL) RFI and the mobile license re-tender are the most 
visible. The mobile license re-tender, in particular, has 
been specifically designed and advertised to attract high 
level foreign investors and is expected to bring in tens of 
millions of dollars per bidder. The greatest vulnerability to 
the NCMC is the challenge to its authority to grant licenses 
to operate and assign spectrum to new entrants and winning 
bidders.  For example, the mobile licensing re-tender, if not 
conducted according to Order 65, is open to legal challenge. 
A legal challenge to the award of mobile licenses in December 
would create uncertainty for mobile customers, the industry 
and irreparably harm the NCMC. 
 
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NCMC CEO PLANS TO SUBMIT LIST TO PM 
----------------------------------- 
 
4.    (SBU) NCMC CEO Othman told us June 22 that he plans to 
submit a list of commissioner candidates to President 
Talabani at the beginning of July.  The list includes himself 
in the combined position of the Chair of the Board and Acting 
CEO.  Othman stated that while he appreciated our help, he 
did not want the US involved in picking candidates and if he 
needed help "I will come to you" (REF C). Order 65 prohibits 
the Director General (CEO) from holding any other government 
positions, to include serving as a member of the Board, and 
it is clear that the intent of the Order contemplates a clear 
separation between oversight and implementation. 
 
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UK MDAT CONTRACT EXTENDED FOR THREE MONTHS 
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5.     (SBU)  The USG and UK have coordinated closely on the 
creation and development of the NCMC as an independent 
regulatory body for telecommunications and broadcast.   The 
British Foreign Service Office has been responsible for the 
media and broadcast institutional framework at the NCMC 
through the MDAT, while the USG is concentrating its 
technical advice on the telecommunications area.  Upon 
learning a few weeks ago that the MDAT's contract would not 
be renewed by the UK, the Charge sent a letter to UK 
Ambassador Patey suggesting that continued funding and 
support of the MDAT through the December elections is 
important.  MDAT informed us on June 28 that their contract 
is renewed for 3 months.  We will continue to pursue an 
extension of their services through the election. 
 
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UK MDAT WILL LOBBY FOR FULL NCMC BOARD 
-------------------------------------- 
 
6.    (C) MDAT's first priority is to get the ITG to appoint 
a full complement of nine commissioners to the Board, in 
accordance with Order 65, thereby ensuring that NCMC 
decisions are legal and less vulnerable to challenge by the 
industry.  Simon Haselock, the lead member of the MDAT, 
stated that MDAT's strategy is to educate the ITG on the 
importance of the NCMC, its role in bringing in foreign 
investment and the vulnerability of all of its decisions, 
particularly the mobile re-tender, while operating without a 
quorum.  MDAT will not recommend particular candidates, but 
will stress the need to meet the requirements set out in 
Order 65.  MDAT will not oppose or support Othman's current 
position or his quest to be Chair, other than to advise the 
ITG that he cannot, without violating Order 65, be both a 
commissioner, chair or otherwise, and CEO at the same time. 
(NOTE: Order 65 states that the CEO of the NCMC may not hold 
any executive or legislative position, appointed or elected, 
at any level of government. END NOTE). 
 
7. (C) Othman will initially present his suggested list of 
commissioners to fellow Kurd, President Talabani, in order to 
enlist his help with the PM. Haselock, therefore, met with 
President Talabani's Chief of Staff, Kamran Karadaghi, on 
June 29, to discuss the need for a properly established 
board.   Karadaghi stated that he is familiar with Order 65. 
He is also familiar with Othman and told Haselock he is well 
aware of Othman's management style alluding to, according to 
Haselock, Othman's micromanagement of issues. Karadaghi 
agreed that the NCMC is an important regulatory institution 
and must be made to fully comply with the law so that future 
decisions are not challenged, the mobile re-tender among the 
most important.  Haselock told Karadaghi that Othman intends 
to submit a list of candidates with himself in the combined 
Chair/CEO role.  Karadaghi agreed that the combined role was 
inconsistent with the intent of Order 65 and that he would 
counsel against it. Karadaghi agreed to use his influence to 
assist in the process of appointing new commissioners. 
 
8. (C) MDAT will also enlist the assistance of Minister of 
Communication, Jowan Masum, as an advocate within the 
government for a NCMC that is operating in full accord with 
existing law. Karadaghi agreed with Haselock's strategy to 
engage Masum on this issue. 
 
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USG WILL COMPLEMENT MDAT'S EFFORTS 
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9.(C) We will assist MDAT in its efforts to educate the ITG 
on the need to appoint five commissioners to the NCMC and 
create a full complement of board members as set out in Order 
65.  Our strategy will complement MDAT's focus on educating 
the ITG on what is required by current law and the risks 
attendant to NCMC decisions made while there is no legal 
quorum. Our focus will remain on telecommunications, while 
MDAT focuses on the risk to broadcasting/media decisions. 
 
10. (SBU) We plan to use the following talking points: 
 
--Order 65 requires six sitting and voting commissioners for 
a quorum, but given the substantive challenges and the amount 
of work in front of the NCMC today, we recommend five new 
appointments to create a fully staffed Board. 
 
--NCMC has several initiatives that will increase local 
telecommunications penetration.  The mobile license re-tender 
will bring in millions to the treasury while offering 
world-class mobile services to customers throughout Iraq. 
Both are vital to the economic growth of the country and 
legal challenges to the NCMC's decisions on these initiatives 
will severely impede that growth. 
 
--The eligibility criteria for commissioner candidates must 
be consistent with Order 65. 
 
--Order 65 clearly contemplates a separation between 
executive and administrative functions and offices, and 
commissioners should not hold any other NCMC positions. 
 
--Order 65 defines that the PM recommends candidates and the 
Transitional National Assembly ratifies by simple majority. 
This process, because it is based on consensus building, is 
time consuming and must start immediately. 
--NCMC's Broadcast Program Code of Practice will be essential 
in the upcoming election.  This code prohibits all 
broadcasters (including terrestrial and satellite) from 
inciting violence or public disorder, transmitting terrorist 
messages, or airing unfair or inaccurate broadcasts. A legal 
challenge on the validity of the NCMC's authority would 
impede enforcement. 
--NCMC established a code for media during election campaign 
periods.  This code, which was in effect during the period 
leading up to the January 2005 elections, requires all media 
to report on elections accurately and fairly and requires 
broadcast media to provide equitable and balanced coverage of 
all political parties.  Again, a legal challenge on the 
validity of the NCMC's authority would impede enforcement. 
11. (C) COMMENT: Our support of MDAT's efforts to engage the 
government on the need to nominate and confirm five 
commissioners to the Board is warranted despite Othman's 
request that we not get involved.  First, Othman's concerns 
over US involvement stems from his fear that we will 
challenge his choices and the combined Chair/CEO role he 
desires.  Our joint strategy with MDAT is not to get involved 
in any way on individual nominees but to educate the ITG on 
the requirements set out in Order 65. We will continually 
stress the need to comply with the law. Second, based on 
experience with Othman, he will not move quickly enough, or 
be tenacious enough, to accomplish the task in time for the 
mobile license re-tender.  We need to convince him that it is 
appropriate for us to engage the government on an issue of 
compliance with Iraqi law, especially in a situation where 
the viability of an important institution is at stake. END 
COMMENT. 
Satterfield